Insights

Why the Zip (ASX:Z1P) share price is rocketing 15% higher today

Has this BNPL provider got a new admirer?
The post Why the Zip (ASX:Z1P) share price is rocketing 15% higher today appeared first on The Motley Fool Australia. –

The Zip Co Ltd (ASX: Z1P) share price has been a very strong performer on Thursday morning.

At one stage, the buy now pay later (BNPL) provider’s shares were up as much as 15% to $8.90.

The Zip share price has eased a bit since then but remains up 8% to $8.32 at the time of writing.

Why is the Zip share price rocketing higher?

Investors have been bidding the Zip share price higher today amid speculation that a rival BNPL provider has acquired a strategic stake.

According to the AFR, Swedish BNPL provider Klarna is believed to have picked up a 4% stake in Zip in a move designed to strengthen its position if the BNPL market consolidates to two to three leading global players in the future.

Klarna, which is part-owned by Commonwealth Bank of Australia (ASX: CBA), is one of the top three players in the industry alongside Afterpay Ltd (ASX: APT) and Affirm.

Last month the company raised US$639 million in a new funding round led by Japanese giant SoftBank. This gave Klarna a valuation of US$45.6 billion or A$61 billion. As a comparison, Afterpay’s market capitalisation currently stands at A$35 billion and Affirm’s is US$17 billion or A$22.8 billion.

And based on the latest Zip share price, its market capitalisation lies just short of A$5 billion. This could make it an attractive M&A option should industry consolidation occur in the future.

What now?

Neither Zip nor Klarna have commented on the speculation. And with this strategic stake sitting under 5%, we may not hear anything from either party. This is because only once a shareholder owns an interest of 5% or more are they required to file a notice of initial substantial holder.

Nevertheless, the speculation alone has given the Zip share price a major boost, extending its year to date gain to ~50%.

The post Why the Zip (ASX:Z1P) share price is rocketing 15% higher today appeared first on The Motley Fool Australia.

Should you invest $1,000 in Zip right now?

Before you consider Zip, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Zip wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

5 things to watch on the ASX 200 on Thursday

ASX 200 rises, Challenger soars, Zip jumps

The Afterpay (ASX:APT) share price stormed 5% higher today
These ASX 200 tech shares are beating the broader market today

Why Afterpay, Challenger, MyDeal, & St Barbara shares are charging higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!